Groceries - Abel & Cole delivers at last as demand for vegetable and fruit boxes soars
The 25-year-old organic groceries delivery brand appears to have turned a corner.
Organic vegetable and fruit boxes, once the preserve of middle-class consumers, is a sector that is showing serious potential, if recent figures from organic-box delivery firm Abel & Cole are anything to go by.
Last October, the 25-year-old business was acquired by the William Jackson Food Group, which owns the Aunt Bessie's brand. This heralded a brighter future for Abel & Cole, which had been struggling for several years prior to the acquisition due to a downturn in consumer spend. However, last month it posted an impressive set of financial results, with sales growing by almost a third to £46.5m in the year to 31 August 2012, compared with £35.7m in the previous 12 months.
While this hints at a promising future, the outlook is still tough, with competition from rivals such as Riverford as well as supermarkets. In the London area, Tesco recently introduced Soil & Seed, its own take on the delivered organic produce box.
Abel & Cole founder and director Keith Abel says it aims to grow the core business through increasing customer recruitment, improving retention and increasing average order value.
Yet against such a competitive backdrop, how will Abel & Cole not just survive, but firmly take the high ground?
We asked Charles Coleman, director at DeliSante and a former head of marketing at fresh-produce manufacturer and supplier Natures Way Foods, and Jason Lawes, chief creative officer of Stuff. He is a former creative partner of The Red Brick Road, where he was responsible for the Tesco account.
BRAND HEALTH CHECK DIAGNOSIS
CHARLES COLEMAN, Director, DeliSante (and former head of marketing, Natures Way Foods)
Abel & Cole has managed a fantastic turnaround for a brand that was on its knees just a few years ago. It is doing many things right, with a focus on building a loyal customer base, reducing costs and driving efficiency.
The premium organic food market has slumped by 5.5% to £1.64bn over the past five years ('The Organic Food Market Research Report', Jan 2013). The outlook appears bleak as customers retrench into value; Abel & Cole also operates in a fiercely competitive market, with rival organic box brands and local farmers' markets to contend with, let alone the multiples.
- Build greater trust and integrity. Think about investing in an Abel & Cole Farm to underpin the brand's provenance and legitimacy without undermining existing suppliers.
- Bring the brand to life. Develop concept Abel & Cole convenience stores in London to test the 'click and collect' revolution.
- Give the brand personality and broaden the customer base by sponsoring a 'hero' chef - someone with strong organic credentials such as Hugh Fearnley-Whittingstall, for example.
JASON LAWES, Chief creative officer, Stuff (and former creative partner, The Red Brick Road)
I spent most of the past 12 years writing Tesco ads, so you could say I'm familiar with grocery brands. But there's something about Abel & Cole that doesn't fit the stereotype. Weirdly, it feels more like a luxury-goods or lifestyle brand.
In fact, it has more parallels with another brand I did some ads for, Stella Artois - premium-quality, niche, but growing rapidly, and, at its zenith, not the cheapest in the market. That is something I think Abel & Cole could learn some lessons from: it turned out that selling Stella at the same price as Foster's was a turn-off.
- Don't be distracted by what the supermarkets are doing; you are not competing with them. Someone once told me that for Tesco to sell only free-range chickens it would need a farm the size of Scotland, so clearly it can't compete with you either.
- Continue to behave like a niche retailer: the brand's best chance of entering the mainstream is not to try to do so.
- The artisan feel and attitude of a small producer is what will remain most appealing about the brand.
ABEL & COLE STATS
£46.5m - The company's sales in the year to 31 August 2012
£27m - Reported annual loss in 2010
Sources: Abel & Cole, Companies House
This article was first published on marketingmagazine.co.uk
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